Why Bond Yields Jumped After NFP

Think of Treasury yields as the market's prediction of where interest rates are headed.

### Before NFP

The market was thinking:

"The economy may be slowing, so the Fed could cut rates soon."

If rates are expected to fall:

* Existing bonds with higher rates become more valuable.
* Investors buy bonds.
* **Bond prices rise.**
* **Yields fall.**

### After Strong NFP

The jobs report said:

> "The economy is still strong."

Now traders think:

* Fed may cut rates later than expected.
* Interest rates could stay higher for longer.
* New bonds issued in the future may offer higher yields.

So investors don't want to pay as much for today's bonds.

### What happens mathematically?

Suppose a bond pays **$40/year**.

If investors pay **$1,000** for it:
Yield = 40/1000 = 4%

If investors sell it and the price drops to **$950**:

Yield = 40/950 =approx 4.21%

The payment didn't change.

The **price fell**, so the **yield rose**.

### Why stocks care

The 10-year Treasury is the "gravity setting" for markets.

If the 10-year yield rises:

* Borrowing gets more expensive.
* Future earnings are worth less today.
* Growth stocks like tech often get pressured.

If the 10-year yield falls:

* Money becomes cheaper.
* Growth stocks usually get a boost.

### The shortcut for your daily trading

When you see:

**Strong NFP / Strong CPI / Strong Retail Sales**

➡️ Higher growth expectations
➡️ Fewer Fed cuts expected
➡️ Bond prices ↓
➡️ Treasury yields ↑
➡️ USD ↑

That chain reaction is one of the most important things to watch for SPY, QQQ, and options trading. 📊